Time to Worry About Apple, Again

Apple Inc. has dropped below its 50-day moving average for the first time in nearly a month, suggesting the technical outlook has turned negative.

The stock was down $16.06, or 3.6% at $427.80, and has now lost 7.8% since closing at a three-month high just six sessions ago. The 50-day MA, which technicians use to gauge the intermediate-term trend, comes in today at $434.87.

“Closing below the 50-day MA is not a ‘magic bullet,’ but it would deem [the outlook] negative,” said Stanley Dash, vice president, applied technical analysis at TradeStation Securities.

Adding to the bearish technical mix is the decline in intermediate-term momentum indicators.

The Relative Strength Index, which measures the magnitude of daily gains against daily losses, has slid below the neutral level of 50, also for the first time since April. That helps “fill out” the negative technical picture for the stock, Mr. Dash said.

Some downside chart levels to note include $425.42, which marks the 50% retracement of the rally off the April 19 intraday low of $385.10 to the May 7 high of $465.75.

The key level to watch, Mr. Dash said, is the early-March and early-April lows around $419.

That level also coincides with the bottom of minor price-gap support range between the April 26 intraday high of $418.99 and the April 29 low of $420.

If that level breaks, there isn’t much left on the charts until the April low of $385.10.